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Tom Luongo: Is this the end of Comex paper gold?

Section: Daily Dispatches

11:23a ET Sunday, August 16, 2020

Dear Friend of GATA and Gold:

Analyzing the recent changes and turmoil in gold, market watcher Tom Luongo concludes that some entities with deep pockets -- almost certainly Russia and China -- are collapsing the "paper gold" system with their delivery demands.

The usual central bank-instigated smashdowns in the monetary metals aren't working anymore, Luongo notes, and nor is the old trick of the New York Commodities Exchange to increase margin requirements on metals futures contracts to scare longs away.

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Luongo writes: "The bulls know that the old market structure is breaking down. They know that London is being drained of gold supply through persistent contango, creating arbitrage opportunities while investors are rightfully nervous about the future. Someone is standing for hundreds of tonnes of delivery in gold while pushing the price higher against the wishes of the exchange."

But Luongo thinks the Comex will survive, with its gold contract evolving into a mechanism for betting on the price without any option for delivery of metal.

His analysis is headlined "Is This the End of Comex Paper Gold?" and it's posted at his internet site here:

CHRIS POWELL, Secretary/Treasurer
Gold Anti-Trust Action Committee Inc.

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